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Fair use
U.S. Copyright Law Introduction The originating objective of copyright, as stated in the U.S. Constitution, was to promote the progress of science and the useful arts. Rewarding the labor of authors is viewed as furthering that objective. The Copyright Act serves this two-tier purpose by vesting in authors of protected works certain exclusive rights. The unauthorized use of copyrighted material constitutes an infringement of these rights, unless the use is excused by a statutory exception. By limiting these rights, the Copyright Act attempts to strike a fair balance between an author’s exclusive rights and the public’s interest in using copyrighted material. The most significant and, perhaps, murky of the limitations on a copyright owner's exclusive rights (particularly online) is the doctrine of fair use.See 17 U.S.C. §107. The judicially created doctrine, although now codified in the Copyright Act, has been described as "so flexible as virtually to defy definition." See Time, Inc. v. Bernard Geis Assoc., 293 F. Supp. 130, 144 (S.D.N.Y. 1968). The fair use doctrine allows people in certain circumstances to use copyrighted material in ways the copyright owner has not authorized and might even forbid if asked. Fair uses are generally limited to uses for useful or beneficial purposes with minimal impact on the market for the work. Fair use is designed to ensure that the rights of authors are balanced with the interest of the public in the free flow of information.See, e.g., Pierre Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. 1103, 1110 (1990). Congress has noted that fair use is the most important limitation on the exclusive rights granted copyright owners,H.R. Rep. No. 94-1476, at 66 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5680 (hereinafter House Rpt.). and the Supreme Court has characterized fair use as one of copyright law's built-in accommodations to the First Amendment.See Eldred v. Ashcroft, 537 U.S. 186, 219-20 (2003). Fair use is an affirmative defense to an action for copyright infringement.Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994). As an affirmative defense, the burdens of persuasion and coming forward with evidence both must be carried by defendants to avoid liability (i.e., a copyright owner need not prove an accused use not fair, but, rather, the defendant must prove its fairness). It is a privilege, not a right. It is considered an "equitable rule of reason, which permits courts to avoid rigid application of the copyright statute when, on occasion, it would” undermine the purpose of copyright.Stewart v. Abend, 495 U.S. 207, 236 (1990). See also Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). It is potentially available with respect to all manners of unauthorized use of all types of works in all media. When it exists, the user is not required to seek permission from the copyright owner or to pay a license fee for the use.Harper & Row, Publishers, Inc. v. National Enters., 471 U.S. 539, 549 (1985) ("use is a privilege in others than the owner of the copyright to use the copyrighted material in a reasonable manner without his consent."). The doctrine of fair use is rooted in some 200 years of judicial decisions. It had its origins as “an equitable rule of reason” derived from English common law.Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 448 (1984). It is a judicially-articulated concept that creates an exemption to the monopoly rights of the copyright holder. Many attribute its first prominent appearance in U.S. law to Justice Story’s decision in Folsom v. Marsh,''9 F. Cas. 342 (D. Mass. 1841). in which a two-volume abridgement of the writings and letters of George Washington was found to borrow too heavily from another author’s twelve-volume compilation. The case is premised on the rule that “a fair and bona fide abridgment of an original work is not a piracy.”''Id. at 345. Although the opinion holds that the abridgement in question was infringing, it sets forth the factors which distinguish a “fair and bona fide abridgment” from an infringing one. These factors characterize the essence of fair use. The most common example of fair use is when a user incorporates some portion of a pre-existing work into a new work of authorship.Id. For example, quotation from a book or play by a reviewer, or the incidental capturing of copyrighted music in a segment of a television news broadcast is fair use. In Campbell v. Acuff-Rose Music, Inc.,510 U.S. 569 (1994). the Supreme Court expressly accepted the proposition that such "transformative" uses are more favored in fair use analyses than uses that amount to little more than verbatim copying.See id. As one moves away from such transformative uses into the area of uses that — for practical purposes — compete with the copyright owner's exploitation of the work, the analysis becomes more difficult (as the number of litigated cases grows). Fair Use Test — 17 U.S.C. §107 Fair use remained exclusively judge-made doctrine until the 1976 Copyright Act, when Congress codified it at 17 U.S.C. §107. The statute does not purport to provide an all inclusive definition; rather, it lays out a multi-factor balancing test.See House Rpt., at 66. Section 107 of the 1976 Copyright Act provides: :Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section sic, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include — ::(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; ::(2) the nature of the copyrighted work; ::(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and ::(4) the effect of the use upon the potential market for or value of the copyrighted work. :The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.17 U.S.C. §107. These factors were first articulated judicially in Folsom v. Marsh, 9 F. Cas. 342, 348 (D. Mass. 1841) (Story, J.). The purposes listed, however, are illustrative, not comprehensive. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577-78 (1994)(Congress intended that courts continue the common law tradition of fair use adjudication and section 107 permits and requires courts to avoid rigid application of the copyright statute, when on occasion, it would stifle the very creativity which that law is designed to foster.) And, because fair use is an “equitable rule,” the courts will consider the public interest in and the goals of copyright.Sega Enters. Ltd. v. Accolade, 977 F.2d 1510 (9th Cir. 1993). A court’s conclusion that a use is “fair” is a mixture of law and fact in any specific context. The language may usefully be divided into two parts: the first sentence, which is largely tautological ("fair use . . . is not an infringement of copyright"), and the analysis required by the second sentence. The recitation of assorted uses in the middle of the first sentence has been held neither to prevent a fair use analysis from being applied to other "unlisted" uses nor to create a presumption that the listed uses are fair.Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 561 (1985). It does, however, provide some guidance on the types of activities which might be considered fair use. The core of Section 107 is the second sentence, in which Congress elaborates a test similar to that articulated by Justice Story more than 150 years ago.Justice Story stated that courts should "look to the nature and the objects of the selections made, the quantity and value of the material used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work." Folsom v. Marsh, 9 F. Cas. 342, 348 (C.C.D. Mass. 1841) (No. 4,901). It is clear that courts must evaluate all four factors in determining whether a particular use is fair, but may also take into account unenumerated "extra" factors, when appropriate.See Pacific & Southern, Inc. v. Duncan, 744 F.2d 1490, 1495 & n.7 (11th Cir. 1984). It would be difficult to articulate a more determinate set of fair use rules, given the variety of copyrighted works, their uses, and the situations in which they can be used. Consequently, both through case law and statutory codification, fair use has historically been decided on a case-by-case basis looking at the totality of the facts at hand.See House Rpt., at 65-66. Although the fair use doctrine has developed primarily in civil cases, those cases have precedential weight in criminal cases, too. The Purpose and Character of the Use Although the fourth factor has repeatedly been held to be the most important of the four factors, the first factor often plays a major role in determining the result when a defendant asserts a fair use defense. The first factor has two primary facets, whether the use serves a commercial purpose, and whether the new use is transformative. Commercial Use Commercial use of copyrighted material cuts against a finding of fair use. In Sony Corp. of America v. Universal City Studios, Inc.,''464 U.S. 417 (1984). the Court declared that all commercial uses were to be presumed unfair,''See id. at 451. thus placing a substantial burden on a defendant asserting that a particular commercial use is fair. According to the Supreme Court “the crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain, but whether the user stands to profit from the exploitation of the copyrighted material without paying the customary price.”Harper & Row Publishers, Inc. v. Nation Enters., Inc., 471 U.S. 539, 562 (1985). This standard does not require courts to make a clear-cut choice between two absolute choices – i.e., making a dispositive decision of whether a use is a “commercial” or “non-profit” per se. Rather, “the commercial nature of a use is a matter of degree, not absolute.”Maxtone-Graham v. Burtchaell, 803 F.2d 1253, 1262 (2d Cir. 1986). This places the question of commercial use on a continuum between two extremes: (1) a use that serves a non-commercial purpose by a non-commercial entity charging no fee whatsoever, and (2) a use that serves a commercial purpose by a commercial entity deriving its revenue directly from a fee charged for the copyrighted material. Transformative Use In Campbell v. Acuff-Rose, Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994)). the Supreme Court indicated that the Sony presumption (that a commercial use is not a fair use) is strongest in cases of "mere duplication" and weakest when a second commercial comer makes a transformative use or uses that add something new or different beyond a mere repackaging or restatement of the original: :"Although such transformative use is not absolutely necessary for a finding of fair use, the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works."Acuff-Rose, 510 U.S. at 579 (citation omitted); see also Leval, 103 Harv. L. Rev. at 1111 ("The use must be productive and must employ the quoted matter in a different manner or for a different purpose from the original. A quotation of copyrighted material that merely repackages or republishes the original is unlikely to pass the test."). For this reason, “the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.”''See Acuff-Rose,'' 510 U.S. at 579. What constitutes a “transformative work” is not subject to exacting definition. However, as a general rule, if the new work “merely supersedes the objects of the original creation,”''Marsh,'' 9 F. Cas. at 348. it is not transformative, but if it “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message,” it is transformative.Campbell, 510 U.S. at 579. Altering the technical format of the files from CD audio format to MP3 format constitutes a transformative use of works has not been made successfully.See, e.g., UMG Recordings v. MP3.com, Inc., 92 F. Supp. 2d at 351 (stating that mere retransmission in another medium is an insufficient basis for transformation) and A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) (same). Transformative uses add new information, new aesthetics, new insights and new understandings. Such uses may include criticizing the copyrighted work, “exposing the character of the original author, proving a fact,” or representing the original work in order to defend or rebut it.Pierre Leval, Toward A Fair Use Standard, 103 Harv L. Rev. 1105, 1111 (1990). The Nature of the Copyrighted Work "This factor calls for recognition that some works are closer to the core of intended copyright protection than others."Acuff-Rose, 510 U.S. at 586. It recognizes that there is a hierarcny of copyright protection in which original, creative works are afforded greater protection than derivative works or factual compilations.Id. Fair use is more difficult to establish in the use of fictional or purely creative or fanciful works, as opposed to more factual or historical (yet still copyrightable) works, such as recollections of public figures, or depictions of newsworthy events.See id. "The law generally recognizes a greater need to disseminate factual works than works of fiction or fantasy."Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 563 (1985). As a result courts have held that this factor weighs in the copyright owner's favor when works of fiction''See'' Twin Peaks Prods., Inc. v. Publications Int'l, Ltd., 996 F.2d 1366, 1376 (2d Cir. 1993). and unpublished works''See'' New Era Publications Int'l, ApS v. Henry Holt & Co., 873 F.2d 576 (2d Cir. 1989), cert. denied, 493 U.S. 1094 (1990). are copied, and in the defendant's favor when factual works''See'' National Rifle Ass'n v. Handgun Control Fed'n, 15 F.3d 559, 562 (6th Cir. 1994). and published works''See'' New Era Publications Int'l, ApS v. Carol Publishing Group, 904 F.2d 152, 157 (2d Cir. 1990). are copied. Also, the fact that a work is published or unpublished is a critical element of this factor.See Harper & Row, 471 U.S. at 564 (noting that the scope of fair use is narrower with respect to unpublished works because the author’s right to control the first public appearance of his work weighs against the use of his work before its release). The use of published works is more likely to qualify as fair use because the first appearance of the artist’s expression has already occurred. Thus, a finding of fair use will be couched between two extremes. Use of an unpublished, creative work weighs against fair use, while use of a published work relating factual material weighs in favor of fair use The Amount and Substantiality of the Portion Used The third fair use factor considers the amount and substantiality of the portion used in relation to the copyrighted work as a whole. This is probably the least important factor, given that the taking of even a small amount — if it is considered the "heart" of the work — can lead to a finding of infringement.See Harper & Row, at 569 (taking of some 300 words held infringing). “There are no absolute rules as to how much of a copyrighted work may be copied and still be considered a fair use.”''Maxtone-Graham,'' 803 F.2d at 1263. Rather, this factor has both quantitative and qualitative components, under which courts have found a use to be unfair where the material used formed a “substantial percentage” of the copyrighted work or where the material was “essentially the heart of” the copyrighted work.See New Era Publications v. Carol Publishing Group, 904 F.2d 152, 158 (2d Cir. 1990). In applying this standard, the Supreme Court has held that this factor “must be examined in context,” focusing on whether the extent of copying is “consistent with or more than necessary to further the purpose and character of the use.”''Campbell,'' 510 U.S. at 590. However, a use can be fair even if it copies the entire work.See Online Policy Group v. Diebold, Inc., 337 F.Supp.2d 1195 (N.D. Cal. 2004) (granting summary judgment to group that published voting machine manufacturer's entire e-mail archive to publicly expose machines' flaws); Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003) (holding defendant's copying of entire images to create online searchable database of "thumbnails" was fair use). The Effect of the Use on the Market Value for the Original While courts have repeatedly identified this as the most significant of the four factors,See Stewart v. Abend, 495 U.S. 207, 238 (1990); Harper & Row, 471 U.S. at 566 (finding, in a case involving copyright infringement of unpublished material, that the fourth factor “is undoubtedly the single most important element of fair use”); Wright v. Warner Books, 953 F.2d 731, 739 (2d Cir 1991)(involving infringement of unpublished material), citing 471 U.S. at 566; Association of Medical Colleges v. Cuomo, 928 F.2d 519, 525 (2d Cir 1990)(involving infringement of published material), citing 471 U.S. at 566; Sundeman v. Seajay Soc’y, 142 F.3d 194, 206 (4th Cir 1998)(involving infringement of unpublished material), citing 471 U.S. at 566; Princeton Univ. Press v. Michigan Document Servs., 99 F.3d 1381, 1385 (6th Cir 1996)(involving infringement of published material), citing 471 U.S. at 566; United Tel. Co. v. Johnson Pub. Co., 855 F.2d 604 (8th Cir. 1988)(involving infringement of published material), citing 471 U.S. at 566; Hustler Magazine v. Moral Majority, 796 F.2d 1148, 1155 (9th Cir 1986)(involving infringement of published material), citing 471 U.S. at 566. See also Consumers Union of United States, Inc. v. General Signal Corp., 724 F.2d 1044, 1050 (2d Cir 1983)(“the fourth factor . . . is widely accepted to be the most important”). the legislative history cautions that it “must almost always be judged in conjunction with the other three criteria.”H.R. Rep. No. 83, 90th Cong.,1st Sess. 33, 35 (1967). It is important to recognize that this factor weighs against a defendant not only when a current market exists for a particular use, but also when a potential market could be exploited by the copyright owner. Harm in either market will, in most instances, render a use unfair.Cf. American Geophysical Union v. Texaco, Inc., 37 F.3d 881, 895 (2d Cir. 1994) ("analysis under the fourth factor must focus on the effect of defendant's photocopying upon the potential market for or value of these individual articles"); Salinger v. Random House, Inc., 811 F.2d 90, 99 (2d Cir.), cert. denied, 484 U.S. 890 (1987) (protecting potential market for author's letters notwithstanding author's profound disinclination ever to publish them). Further, courts should “consider not only the extent of market harm caused by the particular actions of the alleged infringer, but also whether unrestricted and widespread conduct of the sort engaged in by the defendant . . . would result in a substantially adverse impact on the potential market.”''Harper & Row,'' 471 U.S. at 567. The Supreme Court has stated, “the only harm to derivatives that need concern us . . . is the harm of market substitution.”''Id.'' While a “work that merely supplants or supersedes another is likely to cause a substantially adverse impact on the potential market of the original,” courts have held that “a transformative work is less likely to do so.”Sony Computer Entertainment, Inc. v. Connectix Corp., 203 F.3d 596, 607 (9th Cir. 2000), citing Campbell, 510 U.S. at 591; Harper & Row, 471 U.S. at 567-69. The Supreme Court's decisions demonstrate the significant weight given this factor: * In Sony, the absence of any market for home taping licenses, combined with the testimony of some copyright owners that they were indifferent to home copying, led the Court to conclude that there was no cognizable harm.See Sony, at 443-47 (plaintiffs "failed to carry their burden with regard to harm of time-shifting . . . . Harm from time-shifting is speculative and, at best, minimal"). * In Harper & Row, the Court accepted the argument that the defendant's "scooping" of "Time" magazine's right to make the first serial publication of President Ford's memoirs, which caused cancellation of the magazine's contract with Harper & Row, caused harm to the copyright owner. See Harper & Row, at 562. * In Stewart v. Abend, performances of a movie palpably harmed the economic interests of the owner of the copyright in the underlying short story. See Stewart, at 238. * In Campbell, the Supreme Court — because the parody was "transformative" — rejected the court of appeals' determination that the commercial purpose of the parody required the parodist to overcome Sony's presumption of market harm.See Campbell, at 1173. The Supreme Court has emphasized the importance of this factor in cases of noncommercial use.Sony, 464 U.S. at 451 ("A challenge to a noncommercial use of a copyrighted work requires proof either that the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work."). See also Harper & Row, 471 U.S. at 540-41 (finding that harm to potential market was indicated by fact that magazine cancelled its contract to reprint segment of book after defendant published an article quoting extensively from book). Courts in two cases concerning the unauthorized "uploading" and "downloading" of copyrighted materials to and from bulletin board services have held that such uses were not fair uses. In Playboy v. Frena, the court characterized the issue as whether "unrestricted and widespread conduct of the sort engaged in by the defendant bulletin board system operator (whether in fact engaged in by the defendant or others) would result in a substantially adverse impact on the potential market for or value of [[copyright]ed photographs],"Playboy Enters., Inc. v. Frena, 839 F. Supp. 1552, 1558 (M.D. Fla. 1993). and determined that it would. This, in turn, led the court to conclude that there was market harm and, thus, infringement. In Sega v. MAPHIA,Sega Enters., Inc. v. MAPHIA, 948 F. Supp. 923, 41 U.S.P.Q.2d (BNA) 1705 (N.D. Cal. 1996). the court found that Sega established a prima facie case of direct and contributory infringement in the operation of the defendant's bulletin board system (where Sega's copyrighted videogame programs were uploaded and downloaded). In issuing a preliminary injunction, the court found that each of the four factors weighed against a finding of fair use, but found that the fourth factor, in particular, weighed "heavily" against such a finding: :Based on Defendants' own statement that 45,000 bulletin boards like MAPHIA operate in this country, it is obvious that should the unauthorized copying of Sega's video games by Defendants and others become widespread, there would be a substantial and immeasurable adverse effect on the market for Sega's copyrighted video game programs.Id. at 688. First Amendment Fair use is traditionally referred to as an “affirmative defense” to an allegation of copyright infringement. Several cases have raised the question whether copyright laws, including copyright protection laws such as the anti-circumvention provisions of the Digital Millennium Copyright Act, must pass judicial scrutiny under the free speech requirements of the First Amendment. Although, there is a broad societal right to limited use of material that is otherwise protected by copyright, the doctrine is raised as a defense when the use is challenged. The burden of proof falls on the party claiming fair use.American Geophysical Union v. Texaco, 60 F.3d 913 (2d Cir. 1994). The relationship between fair use and the First Amendment was examined by the U.S. Supreme Court in Eldred v. Ashcroft.''537 U.S. 186 (2003). This decision upheld the constitutionality of the Sony Bono Copyright Term Extension Act which added twenty years to the term of copyright.Pub. L. No. 105-298. The Court rejected the argument that a law extending the term of copyright is in fact a regulation of speech which violates the First Amendment. The Court reasoned that because the Copyright Clause and the First Amendment were adopted in close proximity, the Framers viewed copyright’s limited monopoly as being compatible with free speech principles. Copyright itself is “an engine of free expression” because it supplies the economic incentive to create and disseminate ideas. There will rarely be a direct conflict between the copyright monopoly and the First Amendment because the Constitution’s copyright scheme “incorporates its own speech-protective purposes and safeguards.”Eldred,'' 537 U.S. at 217-18. These safeguards are the idea/expression dichotomy and fair use. The former insures that ideas are not copyrightable, only the creative expression of them.17 U.S.C. §102(b) provides that “In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” The latter ensures that the public may use — not only the facts and ideas encompassed within a copyrighted work — but, within the limits of fair use, the creative expression as well. But, the First Amendment does not protect the public right to use the creative expression of others. Personal Use Although not explicit in the Copyright Act’s list of fair use factors, there is judicial precedent for the assertion that a consumer’s private, noncommercial use of copyright-protected material is embodied in the fair use doctrine. Much of this authority is attributable to the oft-cited U.S. Supreme Court decision sanctioning “time shifting” in [[Sony v. Universal City Studios|Sony Corp. v. Universal City Studios, Inc.]]464 U.S. 417 (1984). The Court found that the sale of the Betamax video tape recorder (VTR) did not constitute contributory copyright infringement because the device was capable of a substantial noninfringing use. The VTR allowed private viewers to tape free broadcast television to replay at their convenience, i.e., time shift. Integral to the Court’s decision was its finding that substantial numbers of copyright holders who licensed their works for broadcast did not object to having their broadcasts time shifted by private viewers, and there was no evidence of non-minimal harm to the potential market for, or value of, their copyrighted works. Congress can and has enacted express “personal use” limitations to the copyright monopoly. The Audio Home Recording Act (AHRA) added a new 17 U.S.C. §1008 which prohibits infringement actions based on the manufacture, sale, or use of an audio recording device.17 U.S.C. §1008 provides “No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.” The Act also requires that audio recording devices employ a Serial Copy Management System (SCMS) that sends, receives and acts upon copyright information in the files it plays. Manufacturers and importers of audio recording devices pay royalties on the devices which are distributed to copyright holders. In Recording Industry Association of America v. Diamond Multimedia Systems,''180 F.3d 1072 (9th Cir. 1999). a court of appeals held that the Rio, a hand-held device capable of storing and replaying a digital audio file stored on the hard drive of a personal computer, did not come within the ambit of the AHRA. In its analysis, the court noted that the purpose of the AHRA was to ensure the right of consumers to make analog or digital audio recordings of copyrighted music for their private, noncommercial use.''Id. at 1079, citing S. Rep. 102-294 at 86. The Rio could not make duplicates of any digital audio files it stored, nor could it upload such a file; its sole output was an analog audio signal sent to a user by headphones. Although the Rio player did not come within the AHRA and therefore did not need to incorporate the SCMS, the court did note: :The Rio’s operation is entirely consistent with the Act’s main purpose — the facilitation of personal use. . . . The Rio merely makes copies in order to render portable, or “space-shift,” those files that already reside on a user’s hard drive.Id. Although Sony and Diamond Multimedia are frequently cited as authority for the assertion that time shifting and space shifting are personal uses that constitute legitimate fair uses, the courts have been unwilling to expand these holdings to other contexts. This is particularly so with digital media when the purported fair use threatens to erode or undermine the copyright holder’s ability to maintain exclusive control over the protected property. In UMG Recordings, Inc. v. MP3.Com, Inc.,''92 F.Supp.2d 346 (S.D.N.Y. 2000). the U.S. District Court for the Southern District of New York granted a partial summary judgment finding that defendant MP3.com infringed the copyrights of plaintiff recording companies. The defendant, MP3.com, operated a service called “My.MP3.com,” which was advertised as permitting subscribers “to store, customize and listen to the recordings contained on their CDs from any place where they have an Internet connection.”''Id. at 350. The defendant purchased thousands of CDs in which the plaintiffs held copyrights, and without authorization, copied the recordings onto its computer server. Subscribers, upon initial proof of ownership of the CD, could then access it via the Internet from any computer anywhere. MP3.com argued that its service was the functional equivalent of “space shifting,” or storing the subscriber’s CD, and was analogous to the “time shifting” permitted by the U.S. Supreme Court in Sony. But the court disagreed, finding a presumptive case of copyright infringement because MP3.com was in fact utilizing its unauthorized copy of the CD for the subscriber. Nor did the court find any other basis to support the defendant’s assertion that its use of the plaintiffs’ recordings constituted fair use. The court in U.S. v. Elcom considered the impact of the DMCA on the ability of content users to make “back up” copies, another type of personal use: :Defendant makes much of the right to make a back-up copy of digital media for personal use, holding this right up as an example of how the DMCA eliminates fair use. Defendant relies heavily on Recording Industry Association of America v. Diamond Multimedia Systems, for the assertion that the right to make a copy of electronic media for personal, noncommercial use, is a paradigmatic fair use consistent with the Copyright Act. But, defendant overstates the significance and holding of that decision. The Ninth Circuit was not presented with, and did not hold, that the right to make a copy for personal use is protected as a fair use right or protected as a right guaranteed by the Constitution. Rather, the Ninth Circuit was discussing the Audio Home Recording Act. . . . The court held that copying for personal, noncommercial use was consistent with the Audio Home Recording Act’s main purpose of facilitating personal use.203 F. Supp.2d at 1135 (citations omitted.) The court expressly declined to find a “right” to make back-up copies, and although it acknowledged that making a back up copy of an eBook would in all likelihood be a fair use, it distinguished it from another statutory grant under the Copyright Act —to make back-up copies of computer programs for archival purposes.17 U.S.C. §117. But, a limited right to make a back up computer program for archival purposes does not encompass a broader right to make a back-up copy of a program to facilitate decryption: :Courts have been receptive to the making of an archival copy of electronic media in order to safeguard against mechanical or electronic failure. See Vault Corp. v. Quaid Software Ltd., 847 F.2d 255, 267 (5th Cir.1988). Making a back-up copy of an eBook, for personal noncommercial use would likely be upheld as a non-infringing fair use. But the right to make a back-up copy of “computer programs” is a statutory right, expressly enacted by Congress in Section 117(a), and there is as yet no generally recognized right to make a copy of a protected work, regardless of its format, for personal noncommercial use. There has certainly been no generally recognized First Amendment right to make back-up copies of electronic works.203 F. Supp.2d at 1135. Courts, to date, have also been consistent in rejecting fair use defenses to excuse contributory or vicariously infringing activities in connection with Internet file sharing services that facilitate copyright infringement. NapsterA&M Records, Inc. v. Napster, Inc., 114 F.Supp.2d 896 (N.D. Cal. 2000), aff'd in part, rev'd in part, 239 F.3d 1004 (9th Cir. 2001). was the first well-publicized case addressing the legality of Internet peer-to-peer file-sharing. The trial court in Napster rejected virtually every assertion that the peer-to-peer file-sharing service, or its users, were engaged in a fair use of copyright protected material and found that its users did not meet any of the statutory parameters establishing fair use: * Purpose and character of use. While acknowledging that users downloading from Napster are not engaging in “paradigmatic commercial activity,” neither are they engaged in personal use in the “traditional sense,” i.e., copying occurring within the household which does not confer any financial benefit on the user. The court concluded that the vast scale of Napster use among anonymous individuals does not constitute personal use because a “host user cannot be said to engage in a personal use when distributing that file to an anonymous requester.”114 F.Supp.2d at 912. * Nature of the work. The court found that the sound recordings constitute entertainment, not educational material. * Amount and substantiality of the portion used in relation to the whole. The court found it to be “undisputed” that the copying of MP3 music files involves copying the entirety of the work, which is inconsistent with fair use. * The effect of the use upon the potential market for the copyrighted work. The record companies produced evidence demonstrating that Napster's use reduced CD sales among college students and raises barriers to the companies’ entry into the market for digital downloading of music. Napster users receive for free something that they would otherwise purchase, which may adversely affect the potential market for the copyrighted work. The court also decisively rejected “sampling,” “space shifting,” and “time shifting” of music as potential fair uses of the Napster service. Copyright owners earn royalties from streamed song samples on retail websites. Even if music sampling by Napster users did lead to enhanced CD sales, unauthorized downloading deprives music publishers of royalties for individual songs and would not constitute fair use. And, the district court had no trouble distinguishing consumers’ use of Napster from the practice of time shifting upheld in Sony: :While “time shifting broadcasts merely enables a viewer to see . . . a work which he has been invited to witness in its entirety free of charge,” plaintiffs in this action almost always charge for their music — even if it is downloaded song-by-song. 2000 WL 1182467, *13 (quoting from Sony, supra.) In subsequent cases, courts examining Internet websites or services that facilitate infringing downloading of musical recordings have also rejected fair use defenses. In a motion granting a preliminary injunction against Aimster, the court dismissed the defendant’s contention that Aimster’s end users were engaging in protected personal use as “specious.”In re Aimster Copyright Litigation, 2002 WL 31006142, at *10 (N.D. Ill. 2002). See also Arista Records, Inc. v. MP3Board, 2002 WL 1997918 (S.D.N.Y. 2002). U.S. Trademark Law Under U.S. trademark law, there are two types of fair use: * Classical fair use * Nominative fair use See also * Fair Use and Digital Rights Management * Fair Use and Digital Transmission * Fair Use on the Internet References Category:Copyright Category:Trademark Category:Legislation Category:Legislation-U.S.-Federal Category:Legislation-U.S.-Copyright Category:Legislation-U.S.-Trademark Category:Fair use